211-1 Last Problem Set! F07

# 211-1 Last Problem Set! F07 - MMSS 211-1 Last Problem Set 1...

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MMSS 211-1 Last Problem Set! 1. All firms in a competitive industry have LRTC curves given by C = Q 3 – 10Q 2 +50Q, where Q is the level of the firm’s output. What will be the industry’s LR equilibrium price? What will be the LR equilibrium output level of the firm? 2. Suppose that the market demand curve for a monopoly is given by Q = 100 – 5P. A. What is the inverse market demand curve? B. What is the average revenue curve for the monopoly? C. What is the marginal revenue function that corresponds to this demand curve? 3. T sell 6 units rather than 5, a monopoly must lower price from \$12 per unit to \$11 per unit. What is MR here? Please use a diagram like Figure 11.1 to explain what the areas represent. 4. A monopoly has a demand curve given by P = 200 – Q and TC = Q 2 + 40. Find the monopoly’s profit-maximizing quantity and price. How much economic profit does the monopoly earn? 5. A monopoly’s price is \$20. At this price the absolute value of the elasticity of demand is 2. What is the monopoly’s MC? 6.

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## This note was uploaded on 04/07/2008 for the course MMSS 211-1 taught by Professor Shulz during the Fall '07 term at Northwestern.

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211-1 Last Problem Set! F07 - MMSS 211-1 Last Problem Set 1...

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